Ubisoft hopes its video games languish in ubiquity. Ubisoft Entertainment is the #3 independent video game publisher in the world (behind Electronic Arts and Activision Blizzard). Its titles, including nearly 20 multimillion-sellers such as Assassin's Creed, Just Dance, Far Cry, and Prince of Persia, are published for gaming consoles and devices from Sony, Microsoft, and Nintendo, as well as for PCs. Ubisoft has subsidiaries in some 25 countries, and its games are distributed in more than 50. In 2011 North America overtook Europe as the company's largest market (more than half of sales), the US accounting for more than 45% of all revenue. The founding Guillemot family controls about 20% of Ubisoft.
Outside France, Ubisoft's main subsidiaries are in Germany, the UK, and the US. Among Ubisoft's major production subsidiaries is Red Storm Entertainment, which cranks out multiple popular series based on properties by the subsidiary's co-founder Tom Clancy, including Ghost Recon, Rainbow Six, and Splinter Cell.
Ubisoft has invested heavily in its in-house studios at a time when many rivals are shuttering and consolidating studios in an attempt to cut costs. The company has made its cuts in titles it handles through publishing and distribution, to solidify that internal focus. Games exclusively developed by Ubisoft outnumbered co-productions two-to-one in fiscal 2012. Its co-developed games also focus on strong franchises such as comic book colossus Marvel's Avengers property and Starz' Spartacus series.
Despite recent and ongoing struggles in the console market, it is still more robust than in the previous generation's systems in 2005, and Ubisoft has some of the strongest franchises around. New installments in its Assassin's Creed, Ghost Recon, and Far Cry series, all immensely successful, are on tap for this market. The latter two titles take advantage of being in the shooter genre, which accounts for 35% of industry sales for consoles.
The company's casual games are designed for Nintendo consoles such as the Wii home system and DS handheld devices, as well as for the Xbox's KINECT and PS3's Move motion-sensing devices. Ubisoft will keep on moving with Just Dance by waltzing it across Europe and Asia, as well as getting it on the dance card of Nintendo's upcoming Wii U next-generation console.
In the online and digital arenas, it remains committed to providing titles for marketplaces such as Microsoft's Xbox Live Arcade and the iOS and Android stores. Ubisoft has had success in this sector with games such as motorcycle racing game Trials. The company also makes free-to-play installments of popular console titles such as Ghost Recon and Assassin's Creed.
After two years of sales declines during a global recession and emerging competition from mobile and casual games, Ubisoft's redirected efforts were rewarded with fiscal 2011 (ended March) revenues returning to nearly even with the 2008 high. The console market continues to struggle, but online video game growth has caused the overall game industry to expand, and Ubisoft has capitalized. Fiscal 2012 gradually gained more ground thanks to hits with casual gamers, Just Dance, and avid gamers, Assassin's Creed, along with online games. True to the industry shift, digital revenue more than doubled for the fiscal year. Ubisoft brought its bottom line back into the black, after two years of losses, through reduced R&D costs and lower net borrowing costs.
Ubisoft's strategy banks on two trends. Home console systems are nearing their current cycle's end, and new consoles promise more impressive games through advanced graphics and expanded capabilities. The impending arrival (holiday 2012) of Nintendo's Wii U heralds that shift, though neither Sony nor Microsoft have yet to officially announce a launch for their next-generation consoles. The other trend is the continued expansion of free-to-play games, which Ubisoft expects to provide many more platforms, through mobile devices, to reach new audiences with its popular franchises and increase both profitability and average revenue per user.
In 2011 the company acquired Finland-based game developer RedLynx, a specialist in digital games distribution best known for the hit downloadable game Trials. Also that year Ubisoft bought Owlient, a developer of free-to-play online games; the deal gave the company access to Owlient's extensive community game management expertise. – less
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